Direct Tax and Indirect tax.

Question

Distinguish between following concepts :

Direct Tax and Indirect tax.

Answer 1

Direct Tax	Indirect Tax
(a) It refers to that tax which is paid by a person on whom it is legally imposed.	(a) It refers to that tax which is imposed on one person but paid by the other.
(b) A direct tax is paid by a person on whom it is legally imposed. It cannot be transferred.	(b) Indirect tax is imposed on one person but paid by the other.
(c) In case of public finance, government first determines the volume and different ways of it’s expenditure.	(c) In case of private finance, an individual considers income first and then determines the volume of expenditure.